Singapore: Gold on Tuesday traded firmly below $1,200 an ounce as the dollar was perched at a near nine-year high versus a basket of major currencies, undermining the metal`s appeal as a hedge.
FUNDAMENTALS
Spot gold was little changed at $1,182.40 an ounce by 0019 GMT, after losing 1 percent on Monday.
The U.S. dollar hit fresh highs against the euro on Monday, while the dollar index, which measures the greenback against a basket of six major currencies, hit its highest since April 2006.
Also hurting gold was stronger equities. Shares edged higher in major markets on Monday, while crude oil prices tumbled after a short-lived bounce. The U.S. benchmark S&P 500 closed at a record high.
Greek Prime Minister Antonis Samaras failed to get enough support for his presidential nominee and will call a national election for Jan. 25. Stocks in Athens plunged, while yields on 10-year Greek bonds touched their highest since September 2013.
The news failed to trigger enough safe-haven bids for gold to offset the strength in the dollar.
Bullion trading volumes were thin due to the Christmas and year-end holidays. Floor trading for CME Group`s precious metals futures and options products will be closed on Jan. 1.
In news from the physical markets, U.S. Mint American Eagle gold coin sales are on track to fall nearly 40 percent in 2014, the biggest drop in eight years. Gold coin sales reached 524,500 ounces in 2014 so far, down from 856,500 ounces in 2013, data on Monday showed.
China`s gold imports from Hong Kong in November rose to their highest level since February, indicating strong demand in the world`s top bullion consumer ahead of the Lunar New Year.
